Discuss equity theory and how it
relates to managing for motivation.
ANSWER
Equity
theory asserts that when people believe they have been treated unfairly in
comparison to others, they try to eliminate the discomfort and restore a
perceived sense of equity to the situation. Perceived inequity occurs whenever
a person feels that the rewards received for his/her work efforts are unfair
given the rewards others appear to be getting for their work efforts. Perceived
equity occurs whenever a person perceives that his/her personal rewards/inputs
ratio is equivalent to the rewards/inputs ratio of a comparison other.
In using
equity theory to guide managerial efforts to influence work motivation,
managers should recognize that people who feel underpaid may experience a sense
of anger and people who feel overpaid may experience a sense of guilt. Managers
should also understand that perceptions of rewards in a social context, not the
absolute value of the rewards, determine motivational outcomes. Finally,
managers should ensure that any negative consequences of the equity comparison
are avoided, or at least minimized, when rewards are allocated.
Source: Management, 11th Edition
& 12th Edition- John R. Schermerhorn
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